Light sweet crude for the December delivery declined 0.49 percent or 43 cents to $86.66 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the December delivery fell 0.29 percent or 31 cents to $107.86 a barrel on the ICE futures exchange in London.

Investors are eagerly waiting for the U.S. Department of Labor's monthly non-farm payrolls report, which is the most closely watched economic statement pertaining to the job market and a key gauge for the direction and pace of the economic recovery.

The much-awaited U.S. jobs report is due to be released before markets open Friday and is expected to show that the world’s largest economy added 130,000 jobs last month, up from 114,000 jobs added in September. However, the unemployment rate is likely to edge up to 7.9 percent in October from 7.8 percent in the previous month.

Crude futures advanced Thursday as encouraging economic reports from the U.S. and China eased the concerns over the global growth slowdown. Meanwhile, the U.S. Energy Information Administration (EIA) said U.S. oil inventories fell by 2 million barrels last week compared to Reuters’ estimate of a rise by 1.5 million barrels.

On Thursday, the light sweet crude for the December delivery gained 1 percent or 85 cents and settled at $87.09 a barrel on the New York Mercantile Exchange while Brent crude for the December delivery advanced 0.6 percent or 68 cents and settled at $108.02 a barrel.

A slew of encouraging economic reports from the U.S., including ADP employment, initial jobless claims and ISM Manufacturing, pointed to stabilization and eased concerns over the strength of economic recovery in the world's largest oil consumer.

Payroll firm ADP Employer Services said that the U.S. private sector added 158,000 jobs in October, up from a revised 114,000 jobs added in September and also topped analysts’ estimate of 135,000 new jobs. The ADP data came one day before the government's monthly nonfarm payroll report and raised hopes that October employment report would be better than what the initial consensus had indicated.

A separate report showed that manufacturing activity in the world’s largest economy expanded for the second straight month in October. The ISM data came on the same day after an official report showed that Chinese manufacturing activity expanded for the first time in three months, indicating some stabilization in the global recovery trend, particularly in the U.S. and China, the world’s largest and second largest oil consumers.